ANCHORAGE, Alaska–(BUSINESS WIRE)–First National Bank Alaska’s (OTCQX:FBAK) unaudited net income for the fourth quarter of 2022 was $14.4 million, or $4.54 per share. This compares to net income of $16.3 million, or $5.16 per share, for the same period in 2021. Unaudited year-to-date net income was $58.2 million, or $18.39 per share, compared to $58.4 million, or $18.45 per share, for the same period in 2021.
“Our bank extended its strong performance in our Centennial year, despite the challenging interest rate environment,” said Betsy Lawer, First National Board Chair and CEO/President. “Now, as we enter our next 100 years, the bank’s expert team of more than 600 Alaskans stands ready to conquer the challenges ahead. With the latest technology and local expertise at our disposal, we look forward to helping shape a brighter tomorrow for our customers, our communities and our shareholders.”
Assets totaled $5.3 billion as of December 31, 2022, decreasing $243.6 million compared to December 31, 2021.
- Total loans increased $99.8 million to $2.2 billion with strong growth in real estate loans.
- Fixed income securities declined in market value due to the steep increase in market interest rates.
- Deposits and repurchase agreements totaled $4.9 billion as of December 31, 2022, decreasing $102.8 million year-to-date, following two prior fiscal periods of historical deposit growth.
Return on assets through December 31, 2022 was 1.04%, a decrease from 1.12% for the same period last year, primarily attributable to lower average assets during 2021.
Interest and fees on loans decreased $2.6 million from the prior year to $112.6 million, due to reduced interest and fees from Small Business Administration Paycheck Protection Program (SBA PPP) loans. Interest and dividends on investment securities increased $10.9 million year-over-year to $42.2 million as a result of increased volume.
The December 31, 2022 year-to-date net interest margin at 2.66% decreased from 2.88% as of December 2021. The average cost of interest-bearing liabilities increased to 0.27% from 0.03% for the full year December 31, 2022 and 2021, respectively, reflecting the sharp increase in interest rates during 2022. The blended yield on interest-earning assets increased slightly resulting from the improvement in blended loan yields as forgiven 1% PPP loans are shed from the portfolio.
As of December 31, 2022, delinquent loans from 30 to 89 days were $3.6 million, 0.16% of outstanding loans, an increase of $3.4 million from December 31, 2021. Nonperforming loans were $5.7 million, 0.26% of outstanding loans, a decrease of $11.9 million from December 31, 2021. The allowance for loan losses at December 31, 2022 was $18.8 million, or 0.84% of total loans.
Noninterest income for the fourth quarter 2022 of $5.9 million decreased 4.3% from the same period last year, and for the full twelve months of 2022 decreased 3.5% from 2021. Bankcard fees and service charges increased year-over-year as consumer spending activity picked up, offset by a decrease in mortgage loan origination income as home purchases and refinancing activity declined.
Noninterest expenses for the full year of 2022 increased 2.5% from 2021. Planned increases in professional services were offset by decreases in employee benefits expense, reflecting improved management of healthcare costs – by both the bank and its employees – and decreased headcount throughout most of 2022.
Notwithstanding continued strong operating results, the balance sheet is impacted by accounting adjustments related to the market value of securities held for investment and classified as available for sale. As the Federal Reserve continues to raise interest rates in an effort to combat inflation, bond prices are negatively affected.
With these interest rate changes, shareholders’ equity was $407.6 million as of December 31, 2022, compared to $554.5 million as of December 31, 2021, a decrease of $147.0 million. A further impact of the reduction in shareholders’ equity was the increase of return on equity as of December 31, 2022 to 12.83% compared to 10.23% for the same period last year. Book value per share as of December 31, 2022 was $128.69, compared to $175.10 as of December 31, 2021.
First National’s December 31, 2022 Tier 1 leverage capital ratio of 9.64% remains above well-capitalized standards. Regulatory capital rules for community banks allow the accounting adjustments related to the market value of securities to be excluded from regulatory capital ratios.
ABOUT FIRST NATIONAL BANK ALASKA
First National Bank Alaska files a quarterly financial report with the Federal Financial Institution Examination Council. The bank’s latest Consolidated Report of Condition and Income (Call Report) is filed by the 30th of the month following quarter-end and is subsequently posted at FNBAlaska.com and at OTCMarkets.com.
Alaska’s community bank since 1922, First National proudly meets the financial needs of Alaskans with ATMs and 28 locations in 19 communities throughout the state, and by providing banking services to meet their needs across the nation and around the world.
In 2022, Alaska Business readers voted the bank the “Best of Alaska Business” in the Best Place to Work category for the seventh year in a row and Best Bank/Credit Union for a second time. American Banker recognized First National in 2022 as a “Best Bank to Work For” for the fifth year running. In the same year, Anchorage Daily News readers voted the bank one of the state’s top three financial institutions for the fourth year in a row in the ADN “Best of Alaska” Awards.
Visit FNBAlaska.com for more information about Alaska’s largest locally owned bank and access to efficient and secure online banking services. First National Bank Alaska is a Member FDIC and Equal Housing Lender.
| Financial Overview (Unaudited) | ||||||||||||||||||||
| Dollars in thousands, except per share and share data | ||||||||||||||||||||
| Three months ended | Year ended | |||||||||||||||||||
|
Dec. 31, |
|
Sep. 30, |
|
Dec. 31, |
|
December 31, |
||||||||||||||
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||||||
| Income Statement | ||||||||||||||||||||
| Net Interest and Loan Fee Income |
$ |
38,194 |
|
$ |
36,987 |
|
$ |
38,758 |
|
$ |
145,370 |
|
$ |
145,601 |
|
|||||
| Provision for Loan losses |
$ |
(276 |
) |
$ |
(1,129 |
) |
$ |
(660 |
) |
$ |
(1,249 |
) |
$ |
2,427 |
|
|||||
| Total Noninterest Income |
$ |
5,916 |
|
$ |
6,335 |
|
$ |
6,183 |
|
$ |
24,607 |
|
$ |
25,490 |
|
|||||
| Total Noninterest Expense |
$ |
24,952 |
|
$ |
23,306 |
|
$ |
23,811 |
|
$ |
93,074 |
|
$ |
90,786 |
|
|||||
| Provision for Income Taxes |
$ |
5,063 |
|
$ |
5,490 |
|
$ |
5,447 |
|
$ |
19,917 |
|
$ |
19,464 |
|
|||||
| Net Income |
$ |
14,371 |
|
$ |
15,655 |
|
$ |
16,343 |
|
$ |
58,235 |
|
$ |
58,414 |
|
|||||
| Earnings per common share |
$ |
4.54 |
|
$ |
4.94 |
|
$ |
5.16 |
|
$ |
18.39 |
|
$ |
18.45 |
|
|||||
| Dividend per common share |
$ |
6.40 |
|
$ |
3.20 |
|
$ |
3.20 |
|
$ |
16.00 |
|
$ |
16.00 |
|
|||||
| Financial Overview (Unaudited) | Quarter Ended | |||||||||||||||||||
| 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | 12/31/2021 | ||||||||||||||||
| Balance Sheet | ||||||||||||||||||||
| Total Assets |
$ |
5,337,737 |
|
$ |
5,502,968 |
|
$ |
5,373,051 |
|
$ |
5,393,217 |
|
$ |
5,581,340 |
|
|||||
| Total Securities |
$ |
2,815,357 |
|
$ |
2,863,905 |
|
$ |
2,817,076 |
|
$ |
2,878,295 |
|
$ |
2,842,950 |
|
|||||
| Total Loans |
$ |
2,227,047 |
|
$ |
2,169,670 |
|
$ |
2,172,230 |
|
$ |
2,107,885 |
|
$ |
2,127,271 |
|
|||||
| Total Deposits |
$ |
4,224,857 |
|
$ |
4,383,798 |
|
$ |
4,161,642 |
|
$ |
4,135,870 |
|
$ |
4,216,924 |
|
|||||
| Repurchase Agreements |
$ |
670,974 |
|
$ |
696,779 |
|
$ |
748,316 |
|
$ |
758,052 |
|
$ |
781,700 |
|
|||||
| Total Deposits and Repurchase Agreements |
$ |
4,895,831 |
|
$ |
5,080,577 |
|
$ |
4,909,958 |
|
$ |
4,893,922 |
|
$ |
4,998,624 |
|
|||||
| Unrealized gain (loss) on marketable securities, net of tax |
$ |
(146,279 |
) |
$ |
(170,608 |
) |
$ |
(109,987 |
) |
$ |
(75,947 |
) |
$ |
8,266 |
|
|||||
| Total Shareholders’ Equity |
$ |
407,550 |
|
$ |
389,118 |
|
$ |
444,218 |
|
$ |
474,019 |
|
$ |
554,530 |
|
|||||
| Financial Measures | ||||||||||||||||||||
| Return on Assets |
|
1.04 |
% |
|
1.05 |
% |
|
1.03 |
% |
|
1.01 |
% |
|
1.12 |
% |
|||||
| Return on Equity |
|
12.83 |
% |
|
12.56 |
% |
|
11.49 |
% |
|
10.76 |
% |
|
10.23 |
% |
|||||
| Net Interest Margin |
|
2.66 |
% |
|
2.63 |
% |
|
2.62 |
% |
|
2.60 |
% |
|
2.88 |
% |
|||||
| Yield on Loans |
|
5.22 |
% |
|
5.09 |
% |
|
4.97 |
% |
|
4.91 |
% |
|
5.12 |
% |
|||||
| Yield on Securities |
|
1.40 |
% |
|
1.33 |
% |
|
1.29 |
% |
|
1.27 |
% |
|
1.40 |
% |
|||||
| Cost of Interest Bearing Deposits |
|
0.21 |
% |
|
0.13 |
% |
|
0.09 |
% |
|
0.07 |
% |
|
0.05 |
% |
|||||
| Efficiency Ratio |
|
54.34 |
% |
|
53.76 |
% |
|
53.91 |
% |
|
54.78 |
% |
|
53.06 |
% |
|||||
| Capital | ||||||||||||||||||||
| Shareholders’ Equity/Total Assets |
|
7.64 |
% |
|
7.07 |
% |
|
8.27 |
% |
|
8.79 |
% |
|
9.94 |
% |
|||||
| Tier 1 Leverage Ratio |
|
9.64 |
% |
|
9.83 |
% |
|
10.03 |
% |
|
10.05 |
% |
|
9.81 |
% |
|||||
| Regulatory Well Capitalized Minimum Ratio – Tier 1 Leverage Ratio |
|
5.00 |
% |
|
5.00 |
% |
|
5.00 |
% |
|
5.00 |
% |
|
5.00 |
% |
|||||
| Tier 1 (Core) Capital |
$ |
553,829 |
|
$ |
559,726 |
|
$ |
554,205 |
|
$ |
549,966 |
|
$ |
546,264 |
|
|||||
| Credit Quality | ||||||||||||||||||||
| Noncurrent Loans and OREO |
$ |
5,899 |
|
$ |
5,864 |
|
$ |
6,454 |
|
$ |
16,585 |
|
$ |
18,217 |
|
|||||
| Noncurrent Loans and OREO/Total Assets |
|
0.11 |
% |
|
0.11 |
% |
|
0.12 |
% |
|
0.31 |
% |
|
0.33 |
% |
|||||
| Noncurrent Loans and OREO/Tier 1 Capital |
|
1.07 |
% |
|
1.05 |
% |
|
1.16 |
% |
|
3.02 |
% |
|
3.33 |
% |
|||||
| Allowance for Loan Losses |
$ |
18,800 |
|
$ |
19,000 |
|
$ |
19,500 |
|
$ |
22,600 |
|
$ |
22,900 |
|
|||||
| Allowance for Loan Losses/Total Loans |
|
0.84 |
% |
|
0.88 |
% |
|
0.90 |
% |
|
1.07 |
% |
|
1.08 |
% |
|||||
| Net interest margin, yields, and efficiency ratios are tax effected. | ||||||||||||||||||||
| Financial measures are year-to-date. | ||||||||||||||||||||
| Per common share amounts are not in thousands. | ||||||||||||||||||||
Contacts
Cheri Gillian
Secretary to the Board of Directors
907-777-3409
www.FNBAlaska.com